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National Company Law Appellate Tribunal, Delhi: In a batch of appeals filed challenging order dated 22-06-2021 passed by the National Company Law Tribunal (NCLT), Mumbai approving the Resolution Plan submitted by ‘Jalan Fritesch Consortium’ with respect to the Corporate Debtor – ‘Jet Airways (India) Limited’ on various grounds primarily being non-payment of full provident fund, gratuity, leave encashment etc to the employees and workmen who are rightly entitled to it, a Division Bench of Ashok Bhushan J. (Chairperson) and Barun Mitra J. (Technical Member) held that non-payment of full provident fund amount to the workmen and employees and the gratuity payment till the insolvency commencement date amounts to noncompliance of provisions of Section 30(2)(e) of Insolvency and Bankruptcy Code, 2016 (IBC) finding no other parts of the resolution plan to be infirm in any manner. The Court further directed the Successful Resolution Applicant to make pending payments of provident fund and gratuity to the workmen and the employees.

The Court noted that Section 36(4) IBC contains an injunction “the following shall not be included in the liquidation estate assets and shall not be used for recovery in the liquidation”. A plain reading of the above provision indicate that what is excluded from the liquidation estate are sums due to any workman or employee from the provident fund, pension fund and gratuity fund.

Thus, sums due to any workman from the above funds are excluded from the liquidation estate. The legislative intent is clear that any sums due to any workman from aforesaid fund are excluded and cannot be used for recovery in the liquidation. The object is that sums due to any workman and employee from the aforesaid funds should not be used for recovery in liquidation for dues of other creditors since those dues are exclusive to workmen and employees.

In State Bank of India v. Moser Baer Karamchari Union, 2019 SCC OnLine NCLAT 447, the Tribunal approved the decision of the Adjudicating Authority by which the Adjudicating Authority directed that the provident fund, pension fund and gratuity fund do not come within the meaning of liquidation estate.

Further reliance was placed on Tourism Finance Corporation of India Ltd. v. Rainbow Papers Ltd., 2019 SCC OnLine NCLAT 910, wherein the Tribunal held that no provision of the Employees Provident Funds and Miscellaneous Provision Act, 1952 is in conflict with the provisions of I&B Code and thus directed to pay the full amount of provident fund by the Successful Resolution Applicant.

In Savan Godiwala v. Apalla Siva Kumar, 2020 SCC OnLine NCLAT 191, it was held that in a case, where no fund is created by a company, in violation of the statutory provision of Section 4 of Payment of Gratuity Act, 1972, in that situation also, the Liquidator cannot be directed to make the payment of gratuity to the employees because the Liquidator has no domain to deal with the properties of the Corporate Debtor, which are not part of the liquidation estate.

The Supreme Court in Sunil Kumar Jain v. Sundaresh Bhatt, 2019 SCC OnLine SC 2159, directed that the share of workmen dues shall be kept outside the liquidation process and the concerned workmen/employees shall have to be paid the same out of such provident fund, gratuity fund and pension fund, if any, available.

The Court noted that present is a case where resolution plan has been approved; present is not a case of liquidation. Under the provisions of 1952 Act, the Corporate Debtor is statutorily obliged to deposit the provident fund of the workmen and employees with the EPFO which has not been deposited as per the Additional Affidavit of the Resolution Professional dated 25-07-2022. Insolvency commencement date being 20-06-2019, the Corporate Debtor was obliged to deposit the contribution towards provident fund with EPFO.

The claim of provident fund till the insolvency commencement date, of the workmen and employees was to be accepted and Successful Resolution Applicant was liable to make payment of provident fund till the date of initiation of CIRP and statutory obligation of the Corporate Debtor was liable to be discharged by the Successful Resolution Applicant.

However, from the Affidavit of Resolution Professional, it is clear that Resolution Professional in the claim which has been admitted of the workmen for 24 months, the provident fund and gratuity amount was also included. The workmen have received payments with regard to provident fund and gratuity in part under the Resolution Plan subject to the liquidation value of the workmen.

Thus, workmen are entitled for issuing appropriate direction to Successful Resolution Applicant to make payment of the workmen of the provident fund and gratuity dues up to the date of insolvency commencement date less the amount already received under the Resolution Plan towards provident fund and gratuity. The Corporate Debtor having not deposited the statutory dues with the EPFO, the said statutory liability has to be discharged by the Successful Resolution Applicant.

The Court remarked that with regard to pension no materials have been brought before the Tribunal to indicate that the Corporate Debtor has any rules /provisions for payment of pension, hence, no direction with regard to pension were issued.

Thus, the Court held that the workmen and employees are entitled for payment of full amount of provident fund and gratuity till the date of commencement of the insolvency which amount is to be paid by the Successful Resolution Applicant consequent to approval of the Resolution Plan in addition to the 24 months workmen dues as the workmen are entitled to under Section 53(1)(b) of IBC.

[Jet Aircraft Maintenance Engineers Welfare Association v. Ashish Chhawchharia, Company Appeal (Insolvency No. 752 of 2020, decided on 21-10-2022]

Advocates who appeared in this case:

For Appellant: Mr. Swarnendu Chatterjee, Ms. Deepakshi Garg, Mr. Yashwardhan Singh, Advocates.

For Respondent: Mr. Malhar Zatakia, Mr. Dhiraj Kumar Totala, Ms. Aditi Bhansali, Ms. Tanya Chib and Mr. Parimal Kashyap, Advocates for RP (AZB & Partners) Mr. Raghav Chadha, Advocate.

Mr. Raunak Dhillon, Ms. Isha Malik and Ms. Niharika Shukla, Advocates for R-2.

Ms. Ritu Sobti, Ms. Priyanka Sethia, Advocates for Intervenor in I.A 1985, 1986 of 2022.

Mr. Krishnendu Datta, Sr. Advocate with Mr. Rajat Sinha, Mr. Burjis Shabir, Ms. Srishty Kaul, Advocates for SRA

*Arunima Bose, Editorial Assistant has put this report together.

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal, New Delhi (NCLAT): The Coram of Justice Ashok Bhushan (Chairperson) and Shreesha Merla (Technical Member), held that the implementation of the Jet Airways Resolution Plan will be subject to the outcome of appeals filed against the order of National Company Law Tribunal which approved the resolution plan for Jet Airways.

Mr Balbir Singh, ASG appearing for the applicant referred to the order of the Supreme Court dated 15-9-2021 in Civil Appeal No. 3290 of 2017 in the matter of Commissioner of Income Tax v. Jet Airways India Ltd., and Order dated 16-11-2021.

In view of the above-said orders passed by the Supreme Court, Tribunal permitted the applicant to intervene in the present appeal.

Present appeals were filed against the order dated 22-6-2021 passed by the Adjudicating Authority approving the Resolution Plan.

The effective date had been fixed as 28-5-2022 and the process of the implementation of the plan has begun.

Further, the appellant’s counsel expressed their apprehension that in the event their claim was allowed, and the plan was implemented, their claim may not be met by the Successful Resolution Applicant.

Tribunal fixed the appeals on 05th July, 2022 and made it clear that the implementation resolution plan shall abide by the result of the appeals filed.

Lastly, the Senior Advocate, Krishnendu Datta submitted that the Successful Resolution Applicant shall withhold the ‘BKC’ Property, which is a valuable property and till the next date, shall not take any steps for alienation of the said property.

Coram directed that the interim order Company Appeal (AT) Ins. No. 686 of 2021 shall continue. [Association of Aggrieved Workmen of Jet Airways (India) Ltd. v. Jet Airways (India) Ltd., 2022 SCC OnLine NCLAT 222, decided on 30-5-2022]

Advocates before the Tribunal:

For Appellant:

Mr. Siddharth Bhatnagar, Sr. Advocate with Mr. Aditya Sidhra and Mr. Swarnendu Chatterjee, Mr Yashwardhan Singh, Advocates.

For Respondents:

Mr. Arun Kathpalia, Sr. Advocate with Mr. Rohan Rajadhyaksha, Ms. Aditi Bhansali, Mr. Nishant Upadhyay, Mr. Madhur Arora, Mr. Dhiraj Kumar Totala, Ms. Trisha Sarkar and Ms. Tanya Chib, Advocates for R-1 & 3.

Ms Pooja Mahajan, Ms Mahima Singh, Advocates for SRA.

Mr. Raunak Dhillon, Ms. Isha Malik and Ms. Niharika Shukla, Advocates for R-2.

Mr. K. Datta. Sr. Advocate with Mr. Rajat Sinha, Ms. Pooja Mahajan, Ms. Mahima Singh and Ms. Aveena Shrama, Advocates for R-4.

Read more here:

NCLT | Whether Resolution Plan can be shared with Jet Airways employees or not? Verdict explains provisions revolving around confidentiality, purpose of code and more

National Company Law Tribunal
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National Company Law Tribunal (NCLT): The Coram of Kapal Kumar Vohra, Technical Member and Justice P.N. Deshmukh, Judicial Member, while addressing a matter wherein Jet Airways requested Mumbai Airport not remove its assets from its premises, expressed that,

“…it is to be noted that one of the principal objectives of the Code is to provide for revival of the CD and every attempt ought to be made to revive the CD and Liquidation being the last resort.”

An application was filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 in relation to the strategic assets of the Applicant (Jet Airways) which were placed at the respondent’s Hangar and other places at the airport, contending that the applicant had ceased its operation as commercial airline, prior to commencement of Corporate Insolvency Resolution Process (CIRP) and respondent requested the applicant to vacate the facility made available as aforesaid which is in use of the Applicant contending that permission of subject premises granted to the Applicant for its use stood revoked.

The purpose of filing the present application was to restrain the respondent from removing the applicant’s assets lying at the respondent’s premises at Mumbai International Airport Limited (MIAL).

Request for unhindered access to applicants including his representatives, workmen, nominees, etc. was also made.

Analysis and Decision

Coram stated that the Resolution Mechanism was at an advanced stage and since admittedly the premises were made available to the applicant prior to when it ceased its operation as commercial Airlines and it was the applicant’s specific case that the aircrafts, engines, and auxiliary power units etc. were lying at MIAL Airport which required maintenance at regular intervals of seven, fifteen, thirty, ninety and three sixty-five days, for instance, regular check-ups of tyre pressures of aircrafts, the battery recharges and the engine runs.

In Tribunal’s opinion, if the applicant won’t be allowed to have access to the subject premises, it would certainly cause great hardships to the applicant to perform the above-stated activities which in turn would result in severe deterioration in value assets.

Applicant also stated that despite cessation of Airline operations of the CD, the Erstwhile Resolution Professional had, with the approval of the Committee of Creditors, retained a team of personnel to look for the maintenance of aircraft and engines placed at MIAL Airport including Hangar.

Therefore, the respondent was restrained from removing applicant’s assets from its premises including MIAL Hangar and not to deny access to the applicant’s representatives, workmen, nominees, etc. till the adjourned date.

Matter to be listed on 4-3-2022. [SBI v. Jet Airways, 2022 SCC OnLine NCLT 17, decided on 9-2-2022]

Appearance (via video-conference):

For the Applicant: Mr. Rohan Rajadhyaksha, Advocate

For the Respondent: Mr. Vikram Nankani, Sr Advocate

Also Read:

NCLAT | Joint CIRP against Jet Airways to continue, Dutch Trustee allowed to attend CoC meetings as observer

NCLT | Whether Resolution Plan can be shared with Jet Airways employees or not? Verdict explains provisions revolving around confidentiality, purpose of code and more

Once Adjudicating Authority approves Resolution Plan, does it still remains a confidential document? Read what NCLAT says

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National Company Law Appellate Tribunal (NCLAT): Justice Ashok Bhushan (Chairperson) and Dr Ashok Kumar Mishra (Technical Member) expressed that, once Resolution Plain is approved by the Adjudicating Authority, it no longer remains a confidential document, so as to preclude Regulator and other persons from accessing the said document.

Whether the appellant/applicant is entitled to be given a copy of Resolution Plan or any part of the Resolution Plain in the appeal?

Appellant had sought a direction to produce records along with a full set of documents relating to Corporate Insolvency Resolution Process of Corporate Debtor in the application for interim relief.

Question that is to be answered in the present matter is:

Whether appellant is entitled to a copy of Resolution Plan?


Appellant was an association of aggrieved workmen of the Jet Airways (India) Ltd. and were Operational Creditors who filed their claim before the Resolution Professional. The Resolution Plan allocated workmen and employees an amount of Rs 52 Crores. The said Appeal had been filed by the Appellant challenging the order of the Adjudicating Authority approving the Resolution Plan on several grounds.

Analysis, Law and Decision

In view of relevant sections and regulations, Coram expressed that an Insolvency Professional must ensure that confidentiality of the insolvency resolution process, liquidation or bankruptcy process, as the case may be, is maintained at all times. However, this shall not prevent him from disclosing any information with the consent of the relevant parties or required by law.

Section 24 of the IB Code read with Regulation 21 (3) (iii) of Process Regulation 2016, makes it clear that all Members, who were to participate in the meeting of the Committee of Creditors had to be provided copies of all relevant documents.

Therefore, in view of the above, the entitlement of copy of documents during the CIRP is for only those who are to participate in CIRP.

The category of creditors including the Members of the suspended Board of Directors or the partners of the corporate persons, who are entitled to participate in the meeting of the Committee of Creditors are entitled to receive copies of all documents.

Supreme Court in the decision of Vijay Kumar v. Standard Chartered Bank, (2019) 20 SCC 455, held that Members of the suspended Board are entitled to participate in the meeting of the Committee of Creditors. They are also entitled to be given a copy of the Resolution Plan before such meetings are held.

The question which arose in the present proceeding was: Whether the Resolution Plan after it being approved by the Adjudicating Authority, still continues to be a confidential document, so as to deny access to any of the claimants? 

Tribunal observed that when the inspection is permitted of record of the Adjudicating Authority, obviously inspection can very well be made of the Resolution Plan, which is part of the proceedings before the Adjudicating Authority.

Further, the provision of Section 61(3) reaffirms the Tribunal’s view that after approval of the Resolution Plan, Resolution Plan does not remain a confidential document, so as to deny its perusal to a claimant, who is aggrieved by the Plan and has come up on the Appeal.

Adding to the above, Coram elaborated that the Resolution Plan even though it is not a confidential document after its approval, cannot be made available to each and to anyone who has no genuine claim or interest in the process.

In the present case, the appellant is entitled to the relevant part of the Resolution Plan relating to the claim of the workmen and employees. Hence Tribunal directed that part of the Resolution Plan which deals with the claim of workmen and employees should be provided to the appellant by the successful resolution applicant. [Assn. of aggrieved Workmen of Jet Airways (India) Ltd. v. Jet Airways (India) Ltd., 2022 SCC OnLine NCLAT 36, decided on 20-1-2022]

Advocates before the Tribunal:

For Appellants:

Mr. Nikhil Nayyar, Sr. Advocate with Ms. S. Manjula Devi, Advocate

Dr. KS Ravichandran (CS)

For Respondents:

Mr. Arun Kathpalia, Sr. Advocate with Mr. Malhar Zatakia, Mr. Nishant Upadhyay, Madhur Arora, Mr. Dhiraj Kumar Totala Ms. Tanya Chib, Advocates (R-1, 3)

Ms. Isha Malik, Ms. Niharika Shukla and Mr. Raunak Dhillon, Advocates (R-2)

Ms. Pooja Mahajan, Mr. Aashish Vats, Mr. Arveera Sharma, and Ms. Mahima Singh, Advocates (R-4)

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Competition Commission of India (CCI): Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi, Members found no cartelization in respect to the skyrocketing prices by the airlines during the Jat Agitation.

Informant had alleged that Jet Airways, Spice Jet and Indigo had contravened the provisions of Section 3 of the Competition Act.

Informant’s Submissions

During the month of February 2016 when Jat Agitation was going on, domestic airlines had skyrocketed their rates particularly between the Delhi-Chandigarh and Delhi-Amritsar routes.

From the above instance, it was noted that the aviation industry had been exploiting the passengers during such conditions as the same was observed during the Chennai Floods and Nepal Earthquake.

Preliminary Conference

Commission on noting the allegations and submission by the Informant held a preliminary conference and made a reference to the Director-General of Civil Aviation in terms of Section 21 A of the Act, later the Commission sought certain information from 5 airlines.

What did the Commission note?

Commission noted that with the use of algorithms, there exists a high possibility of collusion with or without the need of human intervention or coordination between competitors.

Therefore, Commission opined that there was a need for investigation of the algorithms used by airlines, so as to determine whether the fares set by the airlines during the alleged period were an outcome of collusion or not?

 Hence, on 9-11-2018 an order was passed to cause an investigation to be made.

 DG in its investigation report concluded that no contravention of Section 3(3) read with Section 3(1) of the Act was found against the conduct of Spice Jet, Air India, Go Air and Indigo during the period of ‘Jat’ Agitation, but in regard to Jet Airways, DG excluded the same from its purview of investigation since the airline was grounded in April 2019 and due to grounding of Jet Airways and un-availability of any employee/personnel, the Resolution Professional could not provide any price data, booking dates, capacity of flight, number of passengers flown and the number of price buckets used by Jet Airways during the period of ‘Jat’ Agitation.

After the objections and suggestions were filed, parties were directed to appear for a final hearing on the investigation report on 23-02-2021.

On the fixed date of hearing, Commission noted that neither the informant nor its counsel appeared before the Commission.

Further, Commission considered the matter in its ordinary meeting and decided to pass an appropriate order.

What did the investigation try to ascertain?

It was ascertained whether the increase in air-ticket prices during the period of Jat Agitation was the result of an agreement between the OPs?

Whether the price data suggested any uniformity in prices indicative of price parallelism?

DG found no contravention of Section 3(3) read with Section 3(1) of the Act against the conduct of Spice Jet, Air India, Go Air and Indigo during the period of Jat Agitation.

Analysis and Decision

Commission noted that the existence of an ‘agreement’ is sine qua non before ascertaining whether the same is anti-competitive or not in terms of the scheme of Section 3 of the Act.

Definition of ‘agreement’ as given in Section 2(b) of the Act requires inter alia any arrangement or understanding or action in concert whether or not formal or in writing or intended to be enforceable by legal proceedings.

The establishment of ‘agreement’ would require some explicit or tacit arrangement amongst the parties wherefrom a concert between them can be deciphered. This may include, amongst others, exchange of information in the form of communications/ e-mails or in any other form of communication amongst the competitors, whether – explicit or tacit, oral or in writing, formal or informal including through parallel conduct which cannot be otherwise explained etc.

 In the instant matter, no such emails were found which could show any exchange of information among the airlines establishing any form of collusion during or after the period of Jat Agitation.

The investigation did not reveal any price parallelism or identical pricing of tickets by the airlines.

Further, elaborating more, Commission noted that widespread usage of algorithms in price determination by individual firms could pose possible anti-competitive effects by making it easier for firms to achieve and sustain collusion without any formal agreement or human interaction.

Based on DG’s investigation, Commission noted that airlines were using different software’s for the pricing of tickets in different fare bucket.

No evidence on record was found to establish a cartel amongst the airlines during the period of Jat Agitation.

Hence, no case of contravention of the provisions of Section 3(1) of the Competition Act was made out against the airlines. [Shikha Roy v. Jet Airways (India) Ltd., 2021 SCC OnLine CCI 31, decided on 3-06-2021]

Advocates before the Court:

For SpiceJet Limited: Mr. Abhishek Sharma, Advocate along with Mr. Shashi Shekhar, Executive (Legal) of OP-2

For InterGlobe Aviation Limited: Mr. Raj Shekhar Rao, Senior Advocate with Mr. Sagardeep Rathi, Mr. Pranjal Prateek and Mr. Ebaad Nawaaj Khan, Advocates

For Go Airlines (India) Limited: Mr. Vihang Virkar and Mr. Karun Jhangiani, Advocates along with Mr. Prashant Shinde, Senior General Manager (Legal) of OP-4

For Air India Limited: Mr. Pratik Majumdar, DGM of OP-5

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Tribunal, Mumbai Bench: The Coram of Janab Mohammed Ajmal (Judicial Member) and V. Nallasenapathy (Technical Member),  decided the issue of whether the Resolution Plan could be shared with the employees of Jet Airways.

Who all are the applicants?

Pilots of Jet Airways (Corporate Debtor) were represented by a Union named National Aviators’ Guild, Maintenance Engineers of the Corporate Debtor under the umbrella of Jet Aircraft Maintenance Engineers’ Welfare Association, Bhartiya Kamgar Sena (BKS) and Jet Airways Cabin Crew Association (JACCA) respectively representing 70% of the ground staff and the majority of the Cabin Crew of the Corporate Debtor and All India Jet Airways Officers’ and Staff Association, they all sought a direction to Respondent (Resolution Professional) to furnish each of the entities/applicants a full copy of the entire Resolution Plan approved by the CoC.

Reasoning | Why do the applicants want to know the details of Resolution plan?

Applicants state that they are unaware of the details of the Resolution Plan and hence they needed to know what was provided under the RP for its members and employees.

Vital concern of the applicants is with regard to the terms and conditions of the Resolution Plan. Further, it has been added that any revival plan, for that matter, both in terms of employment and provision for outstanding wages/dues, is vital for their sustenance and mutual benefit.

Some of the employees have lingered on the rolls of the Corporate Debtor despite the financial hardships and difficulty it entailed.

Adding to the above, it has also been stated that natural justice demands that the applicants remain aware of the Plan and how it is going to take care of their interests or adversely affects them.

Applicants would be the most affected by the orders of this Authority approving or rejecting the Resolution Plan. Thus, it becomes imperative that the Applicants are made privy to the Resolution Plan before it is considered.

Further, the applicants claimed that the Resolution Plan could not be held to be confidential as far as the employees of the Corporate Debtor were concerned.

It is settled law that the interest of the Corporate Debtor is of utmost importance and should be scrupulously protected. 

In view of the above stated, the present application has been filed.

Respondent submitted that the IP Regulations mandate the Resolution Professional to ensure and maintain the confidentiality of the information related to the Insolvency Resolution Process since it contains sensitive information and could only be presented to the CoC.

Analysis, Law and Decision

Bench observed that the applicants interest in the Resolution Plan revolves around the payment/recovery of their dues such as remuneration/wages, other perquisites including terminal benefits if any.

What does Regulations 9 & 22 of the CIRP Regulation lay down?

The stated provision lays down the procedure for the workmen and employees to submit their claims before the IRP/RP.

Regulation 22 of the IP Regulations mandates that an Insolvency Professional must ensure that the confidentiality of the information relating to the insolvency resolution process, liquidation or bankruptcy process is maintained at all time.

Hence, Tribunal held that in view of the above-discussed provisions, the reluctance and refusal of the respondent in sharing the copy of the Resolution Plan with the applicants cannot be faulted.

Natural Justice

Recourse to principles of natural justice and audi alteram partem can be taken when the provisions made in a statute fall short of the requirement and the constitutional validity of the Code has been upheld by the Supreme Court in Swiss Ribbons v. Union of India (2019) 4 SCC 17.

Adjudicating Authority cannot digress from the express provisions of the Statute and act in the manner not provided thereunder or sanctioned by the statute.

Tribunal further explained that in view of express provisions in relation to the Resolution Plan, it is clear that the statutory mandate requires that the Resolution Plan can only be presented to the CoC for its approval and presented before the Adjudicating Authority for its satisfaction in approving the same.

Code or the Regulations thereunder do not contemplate presentation or supply of the Resolution Plan or a copy thereof to any other body or entity. 

Bench agreed with the decision in Anil N. Surwade v. Prashant Jain (IA No. 1033 of 2020 in C.P. (IB) No. 1799 of 2018 decided on 28-09-2020).

“…workmen being at par with the secured creditors are also entitled to privileges of a member of CoC would be fallacious and would go against the grain of the intent and purpose of the Code. “

Bench also added that the applicants are Operational Creditors and the Supreme Court has observed that the role of the Operational Creditors is very limited and confined to the satisfaction of their claims.

Therefore after a wholesome discussion, Tribunal denied any relief to the applicants with a reasoned order.[National Aviators’ Guild v. Ashish Chhawchharia, 2021 SCC OnLine NCLT 50, decided on 22-02-2021]

Image credits of the aircraft: Business Today

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National Company Law Appellate Tribunal (NCLAT): While disposing of the appeal filed by Jet Airways (Offshore Regional Hub), a Bench of Justice S.J. Mukhopadhaya, Chairperson, and Justice A.I.S. Cheema, Member (Judicial), and Kanthi Narahari, Member (Technical), gave finality to the Terms and Conditions of the draft Cross Border Insolvency Protocol, entered into between the Resolution Professional of Jet Airways and the Dutch Trustee (Dutch equivalent of Resolution Professional — the administrator in bankruptcy of Jet Airways appointed by the Dutch Bankruptcy Court).

Jet Airways is subject to parallel insolvency proceedings in India and in Netherlands. In India, Corporate Insolvency Resolution Process has been initiated against Jet Airways. And in Netherlands, it has been declared bankrupt and a Dutch Trustee has been appointed to manage its estate. The NCLAT in its earlier order had directed the Resolution Professional, in consultation with the Committee of Creditors (“CoC”), to consider the possibility of a ‘Joint Corporate Insolvency Resolution Process’. By a subsequent order, the NCLAT had directed the Resolution Professional to reach an agreement with the Dutch Trustee and to extend cooperation to each other, pursuant to which the parties reached the instant Cross Border Insolvency Protocol in order to facilitate the proposed cooperation. 

The Terms and Conditions of the Protocol were filed by the parties pursuant to the directions given by NCLAT. Each party had accepted all the clauses of the proposed Protocol. However, they did not agree upon Clause 6.1.2, which relates to the participation of the Dutch Trustee in the meetings of the CoC as an observer. The Dutch Trustee was insisting that he shall be invited to the meetings of CoC as an observer, however, without any voting rights. Per contra, the Resolution Professional asserted that the Dutch Trustee shall not be entitled to participate in the meetings of the CoC. 

At the outset, the NCLAT made it clear that in the present case, the CoC had no role to play as the instant Protocol was reached between the parties pursuant to its directions. It also observed as unfortunate that in spite of the same, the CoC interfered with the matter and put its views to the Resolution Professional, which resulted in the difference of suggestions now before the NCLAT. 

The NCLAT noted that the Dutch Trustee is equivalent to the Resolution Professional in India, and therefore, as per law, he has a right to attend the meetings of CoC. However, to avoid overlapping of power between them, the NCLAT was of the opinion that the suggestion given by the Dutch Trustee should be adopted. Therefore, it directed the inclusion of the following clause into the Protocol:

      6.1.2.—The Dutch Trustee shall be invited to participate in the meetings of the CoC as an observer but shall not have a right to vote in such meetings.

The draft of the Cross Border Insolvency Protocol clause was, thus, made final. It was ordered that the same shall be treated as direction of the NCLAT and compliance of the order would be mandatory subject to other procedures required to be followed by the Insolvency and Bankruptcy Code, 2016. 

The NCLAT also set aside that part of the Judgment passed by the National Company Law Tribunal, Mumbai, dated 20-6-2019, whereby it was observed that the Dutch Court has no jurisdiction in the matter of Corporate Insolvency Resolution Process of Jet Airways (India) Limited (Offshore Regional Hub), and the consequential directions as given to the Resolution Professional in respect of offshore proceedings.

However, it was made clear that the NCLAT had not interfered with the order of admission of the application under Section 7 IBC filed by the State Bank of India against Jet Airways (India) Limited. Therefore, the Joint Corporate Insolvency Resolution Process will continue in accordance with the Insolvency and Bankruptcy Code, 2016. 

The appeal was disposed of accordingly. [Jet Airways (India) Ltd. (Offshore Regional Hub) v. SBI, Company Appeal (AT) (Insolvency) No. 707 of 2019, decided on 26-9-2019]

National Consumer Disputes Redressal Commission
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National Consumer Disputes Redressal Commission, New Delhi (NCDRC): Justice V.K. Jain, Presiding Member, directed Jet Airways India Limited to pay a sum of Rs 1 lakh as compensation for failing to inform the complainant about the change of time.

Complainant is a doctor by profession, who booked an air ticket through Yahoo Tour and Travels on Jet Airways flight from Raipur to Kolkata. Later two flights were combined and the combined flight left Raipur at 10.40 a.m., i.e. 10 hours before the scheduled time of departure, recorded in the ticket issued to the complainant. As a result, the complainant could not appear in the examination he was supposed to appear. Aggrieved with the same, he approached the District Forum by way of a consumer complaint claiming compensation under several heads.

Jet Airways India Ltd. stated that the two flights were combined for commercial reasons and the same was duly intimated to Yatra Online Pvt. Limited and they were also informed in this regard by the call centre of Jet Airways India Ltd.

Yahoo Tours and Travels stated that the mobile number of the complainant having been given to Jet Airways, it was the Airline’s duty to inform the complainant about the re-scheduling.

District Forum allowed the complaint by directing them to refund the amount of Rs 38432 with a compensation of Rs 11 lakhs to the complainant. On being aggrieved with the same, they reached the State Commission where the compensation was reduced to Rs 1 lakh and the other direction remained the same. Finally, on still not being satisfied by the State Commission’s order, they reached this Commission.

NCDRC noted that, the tickets were booked through Yahoo Tour and Travels. The tickets were not booked by the complainants through Yatra Online Pvt. Ltd. Therefore, as far as Yahoo Tours and Travels is concerned, no evidence was present with respect to rescheduling of the flight was given to them. Yahoo Tour and Travels cannot be said to be deficient in rendering services to the complainant merely because tickets were booked through this agency.

As far as Jet Airways India Limited is concerned, it did not even claim to have intimated the change in the scheduled time of the flight to the complainant. Therefore, Jet Airways India Ltd. was clearly deficient in rendering services to the complainant due to non-intimation of the re-scheduling to the complainant.

Considering the facts and circumstances of the case, compensation was decided to be Rs 1 lakh along with simple interest @9% p.a. from the date of the order of the District Forum.[Yahoo Tour and Travels v. Dr Akash Lalwani, 2019 SCC OnLine NCDRC 166, decided on 07-08-2019]

Case BriefsHigh Courts

National Company Law Appellate Tribunal (NCLAT), New Delhi: The 3-Judge Member Bench comprising of Justice S.J. Mukhopadhaya (Chairperson) and Justice A.I.S Cheema (Judicial Member) and Kanthi Narahari (Technical Member), while pronouncing an order in regard to the “Jet Airways” setback addressed the following question:

“Whether separate proceeding(s) in ‘Corporate Insolvency Resolution Process’ against common ‘Corporate Debtor’ can proceed in two different countries, one having no territorial jurisdiction over the other?”

Further, noting the fact that separate ‘Corporate Insolvency Resolution Process’/ liquidation proceedings have been initiated against Jet Airways (India) Limited — ‘Corporate Debtor’, the one in India and another in Netherland, the point of determination as framed was,

“Whether by a Joint Agreement between the ‘Resolution Professional’ of ‘Corporate Debtor’ in India and Administrator in Netherland, as may be approved  by Appellate Tribunal, one proceeding in India can proceed for maximization of the asset of ‘Corporate Debtor’ and balancing all stakeholders, including Indian/Offshore/Creditors/Lenders”?

State Bank of India-Respondent 1, was represented by Ramji Srinivasan, Senior Advocate along with Counsel Karan Khanna.

It was directed to Respondent 1 that it may file a reply suggesting a procedure that may be followed in the facts and circumstances of the case, without any conflicting interest of stakeholders of both the countries.

Tribunal directed case for admission on 21-08-2019.

NCLAT also stated that during the pendency of the appeal, appellant administrator and Respondent 2 – ‘Interim Resolution Professional’ will cooperate with each other. It will be open to the appellant administrator to collate the claims of offshore creditors including ‘Financial Creditors’, ‘Operational Creditors’ and other stakeholders and forward their details to Respondent 2-‘Resolution Professional’ for purpose of preparing the Information memorandum with approval of ‘Committee of Creditors’.

Counsel, Sumant Batra who appeared on behalf of appellant administrator assured that-

  • Appellant Administrator will cooperate in the proceedings in India;
  • Will not sell, alienate, transfer, lease or create any 3rd party interest on the offshore movable and immovable assets of ‘Corporate Debtor’.

In respect to the above undertaking by an appellant administrator, the impugned order dated 20-06-2019 passed by NCLT, so far as it relates to the declaration that offshore proceeding is not maintainable, shall remain stayed.

  • Interim Resolution Professional of this country will ensure that ‘Corporate Debtor’ remains a going concern and will take the assistance of the (suspended) Board of Directors, paid directors and employees.
  • Person authorised to sign bank cheques may issue cheques only after Interim Resolution Professional’s authorisation.
  • Bank accounts of Corporate Debtor be allowed to be operated for the day-to-day functioning of the company such as for payment of current bills of suppliers, salaries and wages of paid director, employees’/workmen electricity bills, etc., subject to availability of fund.[Jet Airways (India) Ltd. v. SBI, 2019 SCC OnLine NCLAT 385, decided on 12-07-2019]
Case BriefsTribunals/Commissions/Regulatory Bodies

Securities and Exchange Board of India (SEBI): A single member bench comprising of Santosh Shukla, Chief General Manager (Adjudicating Officer) exercised his powers under Section 15-I of the SEBI Act, 1992 read with Rule 5 of the Adjudication Rules and imposed a monetary penalty under Section 15-HB upon the defaulting noticees for non-compliance of SEBI directions.

The SEBI, vide its order, had issued certain directions against the noticees which include, inter alia, that the noticees shall disgorge the unlawful gain and interest thereon as directed from the date of listing of the IPO of Jet Airways. The noticees challenged the directions before the Securities Appellate Tribunal which set aside the SEBI order. Thereafter, the Supreme Court, in an appeal preferred by the SEBI, set aside the order of the Appellate Tribunal; consequent to which, the directions issued by the SEBI became final. The noticees defaulted in complying with the directions. In Recovery Proceedings, the disgorgement amount was paid by the noticees, however, they failed to pay the interest thereon at the rate of 10 per cent as directed by the SEBI.

The Adjudicating Officer, considered the allegations levelled against the noticees; their reply; and the material available on record. Notice was taken of the fact that the noticees defaulted in complying with the directions even after the Supreme Court decision. In the view of the Adjudicating Officer, the noticees had completely disregarded the directions of SEBI. Therefore, it was a fit case to impose penalty upon the noticees. Exercising his powers as mentioned hereinabove, the Adjudicating Officer imposed a penalty of Rs 2 lakhs. It was also observed that such defaults seriously compromise the regulatory framework and a lenient view in such cases would defeat the legislative intent of Section 15-HB of the SEBI Act. [Opee Stock-Link Ltd. and Ashok K. Bagrecha, In re, Adjudication Order Reference No. EAD-2/SS/VS/22/32-33/2018-19, Order dated  21-08-2018]